Luxe Austin Homes - rates

One way to reduce the hit of higher mortgage rates

Posted by Grossman & Jones Group on July 5th, 2022

Mortgage rates have risen faster this year than they have in decades.

The average 30-year fixed-rate mortgage has been hovering above 5% for more than a month, taking a toll on prospective homebuyers. While many hopeful buyers have bowed out of the market for now, some are exploring what once seemed like an unlikely option: adjustable rate mortgages, or ARMs. The cost of financing a home has risen so much, so fast that many buyers can't afford to buy a home with a traditional fixed-rate mortgage. The typical monthly payment on an average priced home with a 30-year fixed rate loan and 20% down is more than $600 higher now than at the start of this year -- a 44% increase on principal and interest payments, according to Black Knight, a…

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The Fed raises rates by 0.75%: Its inflation battle continues

Posted by Grossman & Jones Group on June 16th, 2022

The Fed raises rates by 0.75% and improves its inflation-fighting credibility

As expected, the Federal Reserve today raised rates by 0.75%, its largest increase in 28 years, bringing the federal funds rate to around 1.50%. Of note, Fed Chair Jerome Powell highlighted in his comments that the FOMC's primary focus currently is on bringing down inflation in a "clear and convincing" manner over the next few months.

The markets welcomed this rate hike as a signal of credibility in the Fed's inflation-fighting mandate and a step in the right direction toward bringing interest rates back to more neutral territory. The S&P 500 headed higher by over 1.0% on the back of this move, while the tech-heavy Nasdaq was higher by over 2.0%. Chair Powell did note…

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